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In this article, we analyse India's transport sector policy. The study examines the two important modes of transport, viz., road and rail, and analyses the efficiency of transport infrastructure from 2011 to 2019. Through Data Envelopment Analysis (DEA), we evaluate modes in terms of the capacity of registered road goods vehicles and railway goods wagons, truck km/train km and energy consumption and corresponding freight traffic. The analysis gives valuable insight into the fact that rail infrastructure is more efficient than road infrastructure. Still, current transport sector policies promote energy-intensive carbon-fuel road vehicles rather than energy-efficient alternative transport modes. The study suggests the changes that may be incorporated in inputs to improve the efficiency of the road infrastructure. The Data Envelopment Analysis (DEA)-Malmquist Index analysis reports the need for total factor productivity improvement in rail transport and the introduction of technological innovations in road and rail transport sector management. The study employs a well-to-wheel (WTW) based index to ascertain the energy consumed and pollutants emitted by freight-carrying road and rail modes between two leading business hubs of India, i.e., Ludhiana and Mumbai. The paper identifies policy gaps and suggests a holistic approach for need-based roadway investment and a time-bound development of railway infrastructure in India. Our study generates valuable implications for India's policy planners and government authorities and provides new insights to other countries. • The study examines road and rail transport, and analyses the efficiency and energy consumption of these modes. • The study suggests the changes to improve the efficiency of the road infrastructure. • The Data Envelopment Analysis (DEA)-Malmquist Index analysis and well-to-wheel (WTW) based index have been employed for the analysis. • The paper suggests a need-based roadway investment approach and a time-bound development of railway infrastructure. [ABSTRACT FROM AUTHOR]

• During 1993–2018, market services grew at a faster rate than non-market services. • Applying Domar weights we observed that transport and storage was the highest contributor among market services industries, while public administration has made relatively higher contribution to aggregate non-market services TFP growth. • TFP growth in manufacturing has a significant positive effect on TFP growth of both market services and non-market services. • Market services TFP growth is positively impacted by a spillover effect of TFP growth in India's trade partners. The services have been the driver of India's overall growth since the onset of economic reforms in the 1990s. The value-added share of services increased from 41 percent in 1990 to 53 percent in 2018. On average, the sector grew at 7.5 percent annually during 1993–2018, contributing to about half of the aggregate economic growth. Using the India KLEMS data, we examine the trends in total factor productivity (TFP) in individual industries within services and their contribution to aggregate TFP growth in the sector during 1993–2018. We find that transport and storage was the highest contributor among various market services industries followed by financial services, while public administration made a relatively high contribution to aggregate non-market services TFP growth. Moreover, we investigate the factors driving TFP growth in the services sector, particularly the role of manufacturing TFP – looking into spillover effect from manufacturing to market services and non-market services. Our results suggest that TFP growth in manufacturing had a significant positive impact on TFP growth in the services sector. Also, we find evidence of significant productivity spillover effect to India's services sector from other countries, particularly the developed countries. [ABSTRACT FROM AUTHOR]